Officials from Time Warner and AT&T contradicted each other sharply during a Congress hearing session. The CEO of AT&T, Randall Stephenson and his counterpart, Jeff Bewkes gave sharply contradicting statements that put to question the proposed merger of the two giant companies.
The two were speaking at a Congress hearing meant to shed more light on the need for an open internet, among other issues.
AT&T is a leading ISP while Time Warner is one of the major providers of content for consumers. The two companies intend to merge to form a large company that will dominate the internet and disrupt the business model that smaller separate content providers and ISPs use.
However, going by the statements that the two CEOs made during the 2-hour long Congress hearing session, it is clear that the proposed merger of their two companies may not play out as smoothly as the public has been made to believe it will.
The following is a breakdown of some of the things that the two CEOs said and how they contradict what their companies have been doing so far.
First, Jeff Bewkes of Time Warner said that his company does not own any broadband or distribution company and that they are only looking for ways to distribute more content to more people.
It is interesting to note that Bewkes was referring to the need for the company to merge with AT&T, an ISP, to distribute more of its content to a larger audience. However, it is clear that Time Warner has been using HBO to distribute its content to many people in the market. Therefore, it is clearly illogical for the CEO to say that his company has to merge with AT&T to achieve this objective.
Similarly, the Time Warner CEO said that his company is now competing with the likes of Facebook and Netflix in the market and that it needs to be highly innovative to compete effectively. However, this does not sound like the main reason as to why Time Warner should be swallowed by AT&T.
On his part, the AT&T chief made several statements that are glaringly inconsistent with the intended purpose of the merger between his company and Time Warner.
For example, he said that AT&T had played a leading role in the industry since those days when it was the first carrier company for the iPhone. However, one wonders whether it was Apple that was innovating at this time or AT&T. Besides, if AT&T would like to be a highly innovative company, it does not need to buy Time Warner which is a content provider.
Therefore, going by the statements of the two, it appears that the merger of these two companies is hardly based on common and realistic goals.